Tax preparation for out-of-state clients

[curiousgeorge]

Question for the tax preparers here - probably a stupid question - but a wise person once told me that the only stupid question is the one not asked.

Do you take new, out-of-state clients , recommended by existing clients, but you do not meet in person? Contact is by phone only and they send you documents by mail or Fed/Ex.  If yes, how are the tax returns reviewed by the clients before they are e-filed?

Thanks.

[mwcpa]

"Do you take new, out-of-state clients , recommended by existing clients, but you do not meet in person? Contact is by phone only and they send you documents by mail or Fed/Ex. If yes, how are the tax returns reviewed by the clients before they are e-filed?"

Yes, I have clients that I have never met in different state and countries. We communicate by email, fax, phone, etc. Often I will require some up front money before I do any work (like a face to face client). I use a "portal" system where I upload the client tax filings in a pdf format for them to access securely to review (emailing tax returns in dangerous and illegal in at least 3 states that I know of, CA, MA and one of the Dakotas I recall, I belive as long as media mogals hack emails for news and do not go to jail we have issues, RM is still free and his companies hacked emails). I always send them efile forms after I gave them time to review (more often than not with snail mail in a package that includes any original documents provided to us and required by law to be returned). My engagement agreements clearly state that they should review any tax filings before they sign any return or efile form. When I send the efile forms I clearly state that they should review the tax return and that by signing the efile acknowledges to me that they did such.

[curiousgeorge]

mwcpa - As always, many thanks.

[taxref]

My answer is basically the same as MWCPA's. Its not uncommon at all for me to have clients I have never met in person.

Usually the client sends me his information through the mail, along with a copy of his prior years return. I either snail mail or email the preliminary (I always consider my returns to be preliminary until the client reviews them) return to the client. If the client approves, he just signs and sends me the efiling permissions. If there are any questions, we go over them on the phone.

Whether I want a retainer or not depends on the referring client. If the referer is a quick pay, I assume the new client will be as well and don't aske for up front funds. I do the opposite if the referrer is a slow pay.

[TheOtherMe]

The CPA firms where I worked handled it as stated above. One even had a client who worked in Russia. We faxed the return to him and after he review the return, he faxed the efile authorization back. I was amazed.

Retainers would depend on the person doing the referral. All three firms where I worked had clients who moved out of state but still used them as preparers.

[mwcpa]

"email the preliminary "

Be careful..... a number of states have enacted legislation where it is illegal for you to send any document to anyone containing certain personal data like a social security number.... a client can send it to you, but you may not be able to send it to them. As I noted a number of states have these rules/laws, including CA (California Database Breach Notification Act or simply SB 1386), Il (815 ILCS 530/ a.k.a. the Personal Information Protection Act (PIPA)) and MA (General Law c. 93H), to name a few.....